Finding Text
Identification of the federal program: Federal Grantor: U.S. Department of Health and Human Services Assistance Listing No.: 93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Award Period of Performance: January 1, 2020 ? December 31, 2022 Criteria or specific requirement (Including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Providers who received one or more PRF or ARP payments greater than $10,000 in the aggregate were required to report on the use of the funds to the Health Resources & Services Administration (HRSA) Reporting Portal. The U.S. Department of Health and Human Services (HHS) requires the nonfederal entity to report lost revenues in order to support that funding received has been appropriately earned. HHS provided specific guidance in the June 11, 2021 Post-Payment Notice on how to complete the required reporting of lost revenues in the HRSA Reporting Portal. Under this guidance, recipients may choose to apply PRF and ARP payments towards lost revenues using one of the following options: ? Option i ? Up to the amount of the difference between actual patient care revenue ? Option ii ? Up to the amount of the difference between budgeted and actual patient care revenue, if the budget was established and approved prior to March 27, 2020 ? Option iii ? Up to the amount calculated by any reasonable method of estimating revenue Condition: The Hospital?s reporting submissions did not follow the published HRSA guidance related to the reporting of lost revenues. Cause: Internal controls over the review of the method used to report lost revenues in the HRSA reports were not designed with the level of precision necessary to identify submissions that were not compliant with HRSA reporting guidance. Effect or potential effect: Noncompliance with HRSA reporting guidance could result in the submission of incorrect lost revenues to the HRSA Reporting Portal. Questioned costs: None. Context: We inspected lost revenues reported for the Phase 4 PRF submission to HHS using Option ii, whereby the lost revenues reported should be up to the amount of the difference between budgeted and actual patient care revenue, if the budget was established and approved prior to March 27, 2020. However, we determined that the calculation used to report lost revenues was based on the 2022 budget, which was not approved prior to March 27, 2020. Total federal expenditures for Assistance Listing No. 93.498 totaled $1,360,603 for the year ended December 31, 2022. Identification as a repeat finding: This is not a repeat finding. Recommendation: HRSA does not allow reporting entities to amend a previously submitted report after the reporting period has passed. If any future PRF submissions are required, the Hospital should select Option iii for the calculation of lost revenues if a budget approved prior to March 27, 2020 does not exist. Views of responsible officials: Management agrees that the 2022 budget was not approved prior to March 27, 2020, but concluded that the method used is supportable under Option iii. Furthermore, management asserts the amount of lost revenues submitted would not change regardless of the Option selected to calculate lost revenues.